When I first saw the word DEFI, I thought it was some kind of computer game. It sounds as though you are Defying someone or breaking some rules.

DEFI comes from Decentralised Finance, and is a way of giving and getting access to finance without having to go to a financial institution (a bank). So perhaps DEFY is a good explanation of the message that the crypto community is sending to the current fiat based financial system.

Bitcoin is well known as a store of value, currently valued at around $40,000 each. However, it is too slow to be used for small payments and does not earn any interest. Other coins, such as ethereum based tokens are more suitable for small payments but do not themselves earn interest either.

DEFI is a development (there are many) that uses existing coins as collateral to make loans, meaning that the owner can use the value in the coins without having to sell them first. It is an extra layer that builds borrowing and lending into crypto currencies.

I am writing this to be as simple as possible, just to make sure that I understand what crypto is and how it works.

The crypto market has many other facets that will be covered separately, such as trading on exchanges, the use of stablecoins, the development of new coins through ICOs and Decentralised exchanges. There are coins and tokens that are single purpose, there are a multitude of scams and thieves trying to get your coins and the all important question of your wallets and how they work.

Coin trading is becoming a sophisticated profession that requires constant work even to follow and there are developments in autotrading programs that buy and sell on your behalf (known as bots).

The more I look at this the more complicated layers that I see, the good point being that as things are changing so fast anyone can get involved.